Joyce Zacharia
Feb 2
Calculate the maximum stock level, minimum stock level,Re- ordering level and danger stock level???
(a) average consumption 330 units per day
(B) maximum consumption. 420 units per day
(C) minimum consumption. 240 units per day
(D)Re-order quantity 3600units
(E) Re-order period 10 to 15 days
(F) emergency Re-order period. 12days
(B) maximum consumption. 420 units per day
(C) minimum consumption. 240 units per day
(D)Re-order quantity 3600units
(E) Re-order period 10 to 15 days
(F) emergency Re-order period. 12days
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ChatGPT
Feb 2
To calculate the maximum stock level, minimum stock level, re-ordering level, and danger stock level, you need to consider various factors such as lead time, average demand, and desired level of safety stock. Here's how you can calculate each of these levels:
1. Maximum Stock Level: This is the highest level of inventory you want to maintain. It is calculated by adding the re-ordering level (ROL) with the economic order quantity (EOQ) and subtracting the average demand during the lead time.
Maximum Stock Level = ROL + EOQ - (Average Demand × Lead Time)
2. Minimum Stock Level: This is the lowest level of inventory you want to maintain. It is calculated by subtracting the average demand during the lead time from the re-ordering level.
Minimum Stock Level = ROL - (Average Demand × Lead Time)
3. Re-ordering Level (ROL): This is the inventory level at which you need to place a new order to replenish the stock. It is calculated by multiplying the average demand per day by the lead time in days.
Re-ordering Level = Average Demand × Lead Time
4. Danger Stock Level: This is the level of inventory below which you should not allow the stock to fall. It is calculated by multiplying the average demand per day by the maximum lead time in days.
Danger Stock Level = Average Demand × Maximum Lead Time
Note: The lead time is the time taken for the supplier to deliver the goods after placing an order, and the average demand is the average quantity of goods consumed per day.
These calculations may vary depending on the specific requirements and industry practices. It is recommended to consult with inventory management experts or refer to industry-specific guidelines for accurate calculations.
1. Maximum Stock Level: This is the highest level of inventory you want to maintain. It is calculated by adding the re-ordering level (ROL) with the economic order quantity (EOQ) and subtracting the average demand during the lead time.
Maximum Stock Level = ROL + EOQ - (Average Demand × Lead Time)
2. Minimum Stock Level: This is the lowest level of inventory you want to maintain. It is calculated by subtracting the average demand during the lead time from the re-ordering level.
Minimum Stock Level = ROL - (Average Demand × Lead Time)
3. Re-ordering Level (ROL): This is the inventory level at which you need to place a new order to replenish the stock. It is calculated by multiplying the average demand per day by the lead time in days.
Re-ordering Level = Average Demand × Lead Time
4. Danger Stock Level: This is the level of inventory below which you should not allow the stock to fall. It is calculated by multiplying the average demand per day by the maximum lead time in days.
Danger Stock Level = Average Demand × Maximum Lead Time
Note: The lead time is the time taken for the supplier to deliver the goods after placing an order, and the average demand is the average quantity of goods consumed per day.
These calculations may vary depending on the specific requirements and industry practices. It is recommended to consult with inventory management experts or refer to industry-specific guidelines for accurate calculations.
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